BANK OF NOVA SCOTIA $72.16 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $87.8 billion; TSINetwork Rating: Above Average; Dividend yield: 3.6%, www.scotiabank.com) began expanding in Latin America in the 1990s. It’s now focused on Peru, Mexico, Chile and Colombia, but it has a strong presence across the region.
There’s still lots of room to expand banking services throughout Latin America, especially as its growing middle class looks for stable deposit and consumer-lending services.
Bank of Nova Scotia now gets 34% of its revenue from its international division, which provides financial services not just in Latin America and the Caribbean, but also in Asia and other emerging markets.
The bank aims to keep using acquisitions to build on its banking expertise in Latin America.
For example, it has just agreed to buy 51% of the credit card operations of Cencosud S.A., Chile’s largest grocery and department store retailer and the third-largest in Latin America.
The company’s credit card business has 2.5 million cards outstanding and $1.2 billion U.S. of loans. Bank of Nova Scotia will pay $300 million for its stake.
The deal will make the bank Chile’s third-largest credit card issuer. It will also give it a great opportunity to cross-sell its other financial products to Cencosud’s customers.
Bank of Nova Scotia is our #1 safety-conscious buy for 2014.
